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My other suggestion is that to practise banking, one needs a license, which can be revoked. Now that I think of it, Taleb's suggested that banking should be a

My other suggestion is that to practise banking, one needs a license, which can be revoked. Now that I think of it, Taleb's suggested that banking should be a civil servant job. So, no financial engineering or bonuses, just boring paperwork. In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. The idea is, of course, that if all the fancy derivatives blow up, it wouldn't take retail banking with it. I read recently that the UK government was thinking of dropping this, which seemed a bad idea.

imtringued 4y ago
That is already case, it isn't formalized though. If you want to be a bank executive you must prove both theoretical and practical skills and management experience. That is already a steep hill. Also, any criminal record, especially related to banking or money makes it harder or outright impossible to qualify.
- rcxdude 4y ago
  You can also be straight-up banned from the industry, which has the same kind of effect as revoking a license, but doesn't really seem to have been enough of a deterrent.
  - danuker 4y ago
    Banks define their own rules. There is no jail time because unethical behavior is legal or minimally punished. https://www.finance-watch.org/still-going-round-in-circles-the-revolving-door-problem-between-banks-and-their-regulators/ https://www.finance-watch.org/still-going-round-in-circles-t...
amelius 4y ago
> to practise banking, one needs a license, which can be revoked. Most banks are "too big to fail".
- kasey_junk 4y ago
  No. In the US, ant any given time the fed nominates about 10 banks that are “too big to fail”. There are hundreds of banks in the US and a couple fail every year. An interesting question is should the fed use that distinction at all? And if so should it be removed as a penalty for bad behavior.
  - TrickyRick 4y ago
    Maybe the statement should rather be "most banks racking up billions in fines are too big to fail". Wells Fargo certainly is.
gyulai 4y ago
> In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. This thing comes and goes in waves. IIRC the requirement that retail banking and proprietary trading not be mixed was already part of the Glass-Steagall Act that came in the wake of the great depression. Clinton repealed it, which somehow played a role in the Citigroup-Salomon Brothers merger. After the 2008 financial crisis, the "Volcker Rule" was a regulatory effort to bring back this separation, but it took long to implement, is still not fully rolled out (there are exceptions granted, allowing banks a very long time period to trade out of positions they previously held), and there's already talk of rolling it back again.
- rsynnott 4y ago
  > Clinton repealed it Hadn’t realised he was taking a break from the presidency and interning for the Republican Party at the time. (The repeal was of course a Republican bill with voting more or less along party lines…)
  - gyulai 4y ago
    ...sorry, just recounting something from memory I had read a long time ago, with the original source unavailable to me right now. Maybe the original had some bias, or I misremembered or something. Thanks for the correction.
    - jmholla 4y ago
      He did sign it, so you're not completely off base here.
sgjohnson 4y ago
> So, no financial engineering or bonuses, just boring paperwork. Nobody really wants that. We all want to get high on new and inventive financial instruments, to fund our increasingly "chase that paper" lifestyles. In theory it sounds great, in practice the whole world lives in the fast lane now.
dsfyu404ed 4y ago
>My other suggestion is that to practise banking, one needs a license, which can be revoked. You are ignorant of current regulation. While there is no paper license that you have to apply for in most cases there is tons of "if you do X you are a Y and must register yourself with some regulatory agency Z and follow our list of rules for your business to be lawful" which is functionally identical to a license.
aqme28 4y ago
> My other suggestion is that to practise banking, one needs a license, which can be revoked. That's slightly true already with SEC sanctions, but it doesn't really matter. If I make my millions in bonuses but then I can't practice banking anymore? Oh well nbd.

imtringued 4y ago

That is already case, it isn't formalized though. If you want to be a bank executive you must prove both theoretical and practical skills and management experience. That is already a steep hill. Also, any criminal record, especially related to banking or money makes it harder or outright impossible to qualify.

rcxdude 4y ago
You can also be straight-up banned from the industry, which has the same kind of effect as revoking a license, but doesn't really seem to have been enough of a deterrent.
- danuker 4y ago
  Banks define their own rules. There is no jail time because unethical behavior is legal or minimally punished. https://www.finance-watch.org/still-going-round-in-circles-the-revolving-door-problem-between-banks-and-their-regulators/ https://www.finance-watch.org/still-going-round-in-circles-t...

amelius 4y ago

> to practise banking, one needs a license, which can be revoked. Most banks are "too big to fail".

kasey_junk 4y ago
No. In the US, ant any given time the fed nominates about 10 banks that are “too big to fail”. There are hundreds of banks in the US and a couple fail every year. An interesting question is should the fed use that distinction at all? And if so should it be removed as a penalty for bad behavior.
- TrickyRick 4y ago
  Maybe the statement should rather be "most banks racking up billions in fines are too big to fail". Wells Fargo certainly is.

gyulai 4y ago

> In the wake of the financial crisis of 2008 (IIRC), the role of regular banking and hedge fund activities was split in two. This thing comes and goes in waves. IIRC the requirement that retail banking and proprietary trading not be mixed was already part of the Glass-Steagall Act that came in the wake of the great depression. Clinton repealed it, which somehow played a role in the Citigroup-Salomon Brothers merger. After the 2008 financial crisis, the "Volcker Rule" was a regulatory effort to bring back this separation, but it took long to implement, is still not fully rolled out (there are exceptions granted, allowing banks a very long time period to trade out of positions they previously held), and there's already talk of rolling it back again.

rsynnott 4y ago
> Clinton repealed it Hadn’t realised he was taking a break from the presidency and interning for the Republican Party at the time. (The repeal was of course a Republican bill with voting more or less along party lines…)
- gyulai 4y ago
  ...sorry, just recounting something from memory I had read a long time ago, with the original source unavailable to me right now. Maybe the original had some bias, or I misremembered or something. Thanks for the correction.
  - jmholla 4y ago
    He did sign it, so you're not completely off base here.

sgjohnson 4y ago

> So, no financial engineering or bonuses, just boring paperwork. Nobody really wants that. We all want to get high on new and inventive financial instruments, to fund our increasingly "chase that paper" lifestyles. In theory it sounds great, in practice the whole world lives in the fast lane now.

dsfyu404ed 4y ago

>My other suggestion is that to practise banking, one needs a license, which can be revoked. You are ignorant of current regulation. While there is no paper license that you have to apply for in most cases there is tons of "if you do X you are a Y and must register yourself with some regulatory agency Z and follow our list of rules for your business to be lawful" which is functionally identical to a license.

aqme28 4y ago

> My other suggestion is that to practise banking, one needs a license, which can be revoked. That's slightly true already with SEC sanctions, but it doesn't really matter. If I make my millions in bonuses but then I can't practice banking anymore? Oh well nbd.